Net profit for the three-month period came in at 12.2 billion forints ($54.26 million), up from 10.7 billion forints a year earlier and also above analyst forecasts for 11.5 billion forints in a recent survey by financial news website portfolio.hu.

The company, a unit of Deutsche Telekom, said revenues grew by 7.9 percent year-on-year, more than double the pace analysts had expected.

“Revenue development reflects the significant increase in revenues both from energy services and mobile equipment sales, the growing revenues from SI/IT (systems integration/information technology) services and the improving underlying performance of Telekom Hungary,” the company said.

“Net income increased...primarily due to lower financial expenses and lower depreciation and amortisation expenses driven by the lower fixed-asset base,” it said.

The company said financial expenses declined from the previous year due to lower foreign exchange losses and lower interest rates that offset the increase in its net debt.

Magyar Telekom upgraded its full-year revenue guidance to an unspecified level of increase from no change expected earlier. However it left its recent forecast for a 9-12 percent annual decline in earnings before interest, taxes, depreciation and amortisation (EBITDA) unchanged.

“In Hungary, besides further strengthening our market position across all key segments, thanks to our retention efforts, we have managed to minimise churn in the high-margin fixed voice segment and limit ARPU (average revenue per user) erosion in the mobile business,” Chief Executive Christopher Mattheisen said.

The company’s profitability has come under pressure from new taxes on the telecommunications sector, which boosted its special tax bill to 18.2 billion forints in the first half from 12.2 billion in the same period a year earlier.